Many states require any nonprofit organization that plans to solicit donations for a charitable purpose within the state to register with the state (and pay a filing fee) for consumer protection purposes prior to soliciting donations. A “charitable” purpose is generally defined much more broadly for these purposes than it is for federal income tax purposes. Although this can become onerous and expensive for organizations that solicit donations in multiple jurisdictions, ... Keep Reading »
Statute of Limitations and International Reporting Obligations – Be Sure to Close the Door!
When it comes to federal tax matters, an important aspect of risk management includes making sure that the statute of limitations on tax assessments will expire. This is particularly important for tax years where there is a potentially contentious issue or debatable reporting position taken on the treatment of a material item. However, increasing reporting burdens imposed on international activities coupled with exceptions to the statute of limitations heighten the ... Keep Reading »
Foreign Partner’s Gain on Disposition of U.S. Partnership Interest Is Not Taxable
After great anticipation, the Tax Court has held that gain realized by a foreign corporation upon the redemption of its interest held in a U.S. partnership is non-U.S. source capital gain that was not effectively connected with a U.S. trade or business. As such, U.S. income tax could not be imposed on the gain. Although the wheels of justice often turn slowly, the Tax Court ultimately got taxpayers to the right answer in Grecian Magnesite Mining, Industrial & ... Keep Reading »
The DOL’s Fiduciary Rule
This blog post targets employers who sponsor retirement or welfare plans and are concerned about their responsibility to stay informed and track the status of the Department of Labor’s “Fiduciary Rule.” This issue is more subjective than those about which I normally write, but with so many regulatory obligations, I hope you agree that it is worthwhile to decide what to prioritize. Before going further, I warn any financial advisors seeking additional insights into the ... Keep Reading »
District Court Doesn’t Apply Economic Substance Doctrine to Transaction Where Taxpayer’s Sole Motive Was Tax Avoidance
Judge Schiltz of the U.S. District Court of Minnesota recently issued an opinion in Wells Fargo & Co. v. United States, that qualifies as a key development in the law of economic substance. Taxpayers have battled the government for decades over the precise contours of the judicially-created doctrine often advanced by the government and employed by the courts to deny tax benefits of particular transactions that comply with the strict terms of the Tax Code, but which ... Keep Reading »